Does Checkers act as a sublessor for the operation of certain franchised restaurants?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company leases real estate for the operation of its restaurants as well as acts as a sublessor for the operation of certain franchised restaurants. As lessee, the Company is obligated under several noncancelable leases, primarily ground leases that in certain instances it also subleases to franchisees. The Company accounts for leases as both a lessee and a lessor in accordance with ASC 842, Lease.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers does act as a sublessor for some franchised restaurants. Specifically, Checkers leases real estate for its restaurant operations and then subleases some of these properties to franchisees.
Checkers, as the lessee, has obligations under noncancelable leases, primarily ground leases, which in some instances are subleased to franchisees. The company follows accounting standards ASC 842, Lease, for these lease arrangements, acting as both a lessee and a lessor.
For a prospective franchisee, this means that in certain situations, Checkers may lease the property where the restaurant is located and then sublease it to the franchisee. This arrangement could impact the franchisee's lease terms, rental payments, and relationship with the property owner, as Checkers acts as an intermediary. It would be prudent for a prospective franchisee to understand the terms of the sublease agreement and how it affects their obligations and rights regarding the property.